Search form

Tax Analysts Blog

The estate and gift tax has a long history in the United States. The current version celebrated its 100th birthday on September 8, but there were legacy tax experiments throughout the 19th century. The tax was relatively stable for most of its first 80 years, until Republicans made its repeal one of their central tenets and succeeded in labeling it the death tax. The battle seemed to climax in late 2012, when the American Taxpayer Relief Act (ATRA) permanently extended a compromise version. However, both 2016 presidential candidates would revisit the ATRA solution, albeit in radically different ways.

There’s an old expression in politics, “where I stand depends on where I sit.” In the world of international taxation, this can mean that when sitting in the U.S., it is easy to express outrage over the European Commission’s state aid investigations into tax rulings that EU member states issued to U.S.-based multinationals. But it also means that when viewed from a seat in Europe, those investigations are not only acceptable, they are necessary to preserve the integrity of the single market.

This month State Tax Notes turns 25 years old. It’s quite the accomplishment. There were some rocky times, but the magazine has emerged as a place where state and local tax ideas are floated, the debates are spirited, and discussion is informed. The magazine is better than ever, and we’re excited for what the future may hold.

This Thursday the federal estate tax will turn 100. And that brings to mind one of the most familiar set pieces of modern American politics: Republicans call for repealing the estate tax, and Democrats denounce the idea. This year Donald Trump and Hillary Clinton have dutifully assumed their respective roles. And voters have the pleasure of watching this argument unfold. Again.

The European Union has ordered the government of Ireland to collect €13 billion in corporate taxes from Apple Inc. That’s roughly $14.5 billion given current exchange rates; one of the largest tax bills in human history. The determination comes as part of Brussels’ ongoing investigation of state subsidies that take the form of advance tax rulings.There are several aspects to this story that leave Americans scratching their head. Let’s review them.

Not content with routing all of its sales from Europe, Africa, the Middle East, and India through subsidiaries in Ireland – and paying a 12.5 percent corporation tax on the profits – in 1991 Apple negotiated an even better deal with Ireland. That deal, and its 2007 version 2.0, reduced Apple’s tax rate on those profits to just five one-thousandths of 1 percent (.005!) in 2014.

In the wake of the United Kingdom's vote to exit the European Union, another core member of Europe is facing an uncertain future because of proposed major constitutional reform. Italian voters will go to the polls in late October or early November to decide the fate of Prime Minister Matteo Renzi's leftist government. If Renzi's reform passes, it will make governing Italy much easier, but its main aim is to essentially disenfranchise a euroskeptic, populist movement similar to the U.K. Independence Party.

You can feel it in the air. The college football season is just around the corner and we are plenty excited. But there’s another high-stakes drama that is almost as captivating to aficionados of tax policy. In case you missed it, the U.S. Chamber of Commerce has filed suit in federal court challenging the Treasury Department and the IRS over their latest anti-inversion regulations.

There is something very wrong with our priorities as a nation when our elected officials fast- track tax relief for Olympic athletes – many of whom are well-paid professional athletes – and place funding for a serious threat to public health on the back burner. Congress should be ashamed of itself.

Apple is a major part of why the United States is the world's leading innovator on new technologies, particularly those involving telecommunications and computers. The company has over 66,000 domestic employees, and a large percentage of its customers are here -- at least 40 percent, according to its latest annual report. But Apple also aggressively avoids paying taxes in high-tax jurisdictions, particularly the United States. And Apple CEO Tim Cook's recent statements are misleading about why.